The objective of this study was to evaluate increasing concentrations of babassu (Orbignya phalerata) meal partially replacing Tifton-85 bermudagrass hay on dry matter and nutrients digestibility. Twenty-seven crossbred male lambs (90 d of age, 19.57 ± 0.41 kg BW) were randomly assigned to 1 of 3 experimental treatments. Isoenergetic (2.4 Mcal/kg ME) and isonitrogenous (19.6% CP) diets were formulated with 0.63% Ca, 0.36% P, and 2350 IU/kg vitamin A, to meet nutrient requirements for weight gain of 200g/d and were composed of ground corn, soybean meal, mineral premix, Tifton-85 bermudagrass hay, and 0 (T0), 15 (T15), or 30% (T30) babassu meal. Total fecal collection technique was used in this trial. Animals were adapted for 14 d to experimental diets, and between d 37 and d 41, samples of diets, feces and orts were collected. Samples were dried, ground (1 mm), and analyzed for dry matter, crude protein, neutral detergent fiber, acid detergent fiber, ether extract, and mineral matter contents. Digestibility coefficients (DC) were calculated by using the formula: DC (%) = [(nutrient ingested – nutrient in feces)/nutrient ingested] × 100. Data were analyzed as a completely randomized design by using mixed models. The animal was the experimental unit. Contrasts were used to determine linear and quadratic effect of babassu meal addition. The inclusion of babassu meal in the diets linearly increased digestibility of dry matter (T0 = 68.16, T15 = 74.38 and T30 = 79.63%), organic matter (T0 = 72.65, T15 = 78.06 and T30 = 82.44%), crude protein (T0 = 78.21, T15 = 83.19 and T30 = 87.13), ether extract (T0 = 79.62, T15 = 88.17 and T30 = 91.89), and neutral detergent fiber (T0 = 56.96, T15 = 62.91 and T30 = 68.30). Acid detergent fiber digestibility was unaffected by treatments and averaged 62.91%. In conclusion, babassu meal is a suitable feed ingredient to partially replace Tifton-85 bermudagrass in diets for finishing crossbred lambs and feasible for sheep producers, because this by-product is inexpensive when compared with grass hay, and improves dry matter and nutrient digestibility of diets when added up to 30% in dry matter basis.